Loyalty programs have evolved far beyond simple-based systems. Recent research has shown that effective loyalty strategies are increasingly at the heart of hotel direct booking success and overall revenue growth. Let’s explore key trends and insights that shape the future of hotel loyalty programs.
Income impact of modern loyalty programs
The numbers talk to themselves. According to the latest H2C Global Research (2024), large hotel chains can generate 60% of their total revenue through loyalty programs. This huge number underscores the key role loyalty programs play in driving direct booking and sustainable revenue growth. But this not only involves large chains—properties of all sizes are successful through a right-size loyalty solution that meets their specific needs and the guests expect.
What is particularly interesting is how loyalty programs change from traditional points-based systems to a more nuanced, experience-centric approach. The latest research by Eyefortravel and Fornova highlights that loyal members not only book more frequently but also show higher daily spending, which is invaluable for sustainable income growth. Oracle’s Opera Cloud data further supports this, indicating that attributes with fully integrated loyalty systems see significantly higher booking frequency and guest satisfaction.
The financial impact is obvious: Direct booking through loyalty programs helps hotels avoid OTA commissions, which ranges from 15-30% according to Altexsoft’s research. This direct channel optimization has become even more critical in light of the latest changes in the digital landscape, Mirai reported that direct bookings for hotels in Europe fell by 36% due to new digital market regulations.
Learn about the loyal guests of modern times
Today’s loyal guests ignore traditional classifications. Dhurakij Pundit University’s research reveals fascinating insights into different demographic preferences, while EyeFortravel and Fornova’s analysis provides additional context on evolving guest behaviors and expectations:
- Young travelers show high engagement with loyalty programs and are particularly sensitive to mobile-first experiences
- Student travelers are very sensitive to promotional offers and are very sensitive to promotional offers
- Business travelers prioritize consistency and recognition across accommodations, assessing seamless experiences and predictable benefits
- Compared with European or American counterparts
- Loyalty program members typically spend more per stay and show higher booking frequency than non-members
- Only 3% of customer overlap between major hotel groups and OTA loyalty programs, indicating different customer segments
This diversity of loyalty behavior requires a more complex approach to loyalty program design and implementation. The 80-day report shows that this segmentation was particularly noticeable during the 19009 pandemic, when direct booking rates increased by 17% as travelers sought trustworthy brand relationships.
Regional differences in loyalty dynamics
Geographical differences play a crucial role in the effectiveness of loyalty programs. According to research from the International Greek University, the European market shows different patterns:
- Rate parity regulations affect how hotels distinguish their direct booking quotes
- Mobile booking adoption varies greatly by region, and some markets show up to 40% of mobile usage
- Local preferences for payment methods and cancellation policies affect loyalty program structure
- Cultural differences affect the perceived value of various loyalty benefits
In addition, the latest implementation of the Digital Markets Act (DMA) in Europe creates new challenges and opportunities. Mirai’s analysis shows that while DMA initially led to a 30% drop in direct booking clicks, it also stimulates innovation in loyalty programs as hotels seek new ways to maintain direct relationships with their guests.
Psychology of loyalty
Research from the University of Toronto introduces the concept of “psychological ownership” of hotel loyalty. This study shows that guests who have control and contact with their hotel experience show stronger loyal behavior than those who are just satisfied with the accommodation.
Key factors in establishing psychological ownership include:
- Control accommodation elements (room selection, pillow type, minibar content, etc.)
- Personal investment
- A deep connection to the property’s story and products
- An in-depth understanding of the hotel’s unique features and history
The study shows that psychological ownership can continue to increase loyalty even when satisfaction reaches a plateau, suggesting that hotels should focus on creating experiences to promote this sense of ownership as well as traditional metrics of satisfaction.
Exploration of subscription models
Subscription-based loyalty models have gained attention in the hospitality industry in recent years. Saber Hospitality’s research highlights how subscription-based loyalty is provided by:
- Exclusive membership fees for ordinary guests
- Visit local members’ hotel amenities
- Professional packages for travelers
- Non-resident facility access (e.g., gym membership, pool access)
These subscription methods not only provide opportunities to generate reliable income, but also promote deeper guest relationships through regular engagement. According to the latest analysis from Skift, the model has proven particularly effective for branded hotels, which now captures up to 38% of bookings through direct channels.
The role of technology in the development of loyalty
The success of modern loyalty programs depends on complex technology integration. Oracle Opera Cloud data shows that properties with fully integrated loyalty systems will see higher booking frequency and guest satisfaction. This integration can:
- Real-time preference tracking across performance
- Personalized communication at each touch point
- Seamless reward redemption
- Zero-sum first-party data collection for enhanced personalization
- Integrated cybersecurity measures to protect guest data
According to Ireckonu’s 2024 Technology Trends Report, personalization at every stage of the guest journey will become mandatory rather than differentiated, a strong technology infrastructure that is crucial to future success. The report highlights several key technical components that hotels must consider:
Data security and privacy
With cybersecurity becoming the highest priority for hotels, protecting guest data is crucial. Hotels must work with technology providers that comply with ISO 2022:27001 standards and ensure compliance with evolving privacy regulations such as GDPR. This is especially critical because loyalty programs collect and utilize increasingly detailed visitor preference data.
Advanced communication channels
Modern loyalty programs must adapt to new communication preferences, especially among millennials and Gen Z travelers who prefer live messaging via WhatsApp, SMS or email. AI-powered chatbots can handle fast responses while maintaining options for human interaction on more complex issues, providing a balanced approach to guest communication.
Middleware solutions
System integration becomes increasingly complex as hotels grow through acquisitions and expand their loyalty. Modern middleware solutions, such as property management systems (PMS), are critical to connecting different systems and ensuring a guest experience across properties. This technology enables real-time two-way data exchange without the need for a single integration between each system.
A loyal future
Looking ahead to 2025 and beyond, some key trends have emerged:
Super personalized
The future of loyalty lies in super-personal experiences, transcending universal points and rewards to truly personalized benefits. Altexsoft stresses that even simple loyalty benefits can significantly affect direct booking rates once correctly implemented and communicated.
Seamless integration
A successful program will integrate smoothly across all touch points of the guest journey, from booking to post-down engagement. H2C Global Research highlights that mobile IBE share a portion of total IBE revenue growth of 7% in 2023, highlighting the importance of mobile-first strategies.
Value-based identification and discounts
The program will increasingly focus on recognizing the value of guests outside of indoor revenue, including convenience use and participation with the property. This approach is consistent with the University of Toronto’s findings on psychological ownership and its impact on long-term loyalty.
Make loyalty work for your property
Whether you are a boutique hotel or part of a larger chain, the key to success in loyalty is finding the right balance of technology, personalization and value proposition. Altexsoft’s research highlights that even simple loyalty benefits, if implemented and communicated correctly, can significantly affect direct booking rates.
Actual implementation strategy
Ezee Absolute Research highlights several key elements of a successful loyalty program:
Mobile-first approach
- Ensure responsive design on all devices
- Simplify the booking process for mobile users
- Seamlessly integrated mobile payment options
Enthusiastic content and communication
- Use high-quality images and detailed description
- Implement real-time availability updates
- Stay consistent across channels
Value-added services and discounts
- Provides secure and flexible payment methods
- 24/7 support through multiple channels
- Create exclusive packaging for loyal customers
Measuring success and adaptation
According to Oracle’s data sheet on Opera Cloud loyalty, successful loyalty programs should track key metrics, including:
- Loyal customers booking frequency increases
- Comparison of average spending per stay
- Planned participation rate
- Direct booking conversion rate
- Changes in customer life value
In an era, according to Skift’s 2024 report, OTA’s slightly leading hotel direct bookings (266B $262B total bookings), the opportunity to gain growth through an effective loyalty program has never been more obvious. Adapting to its loyalty approach to meet changing guest expectations at the hotel while leveraging the right technical solutions will have great locations to capture and retain valuable direct bookings for years to come.
P3 Hotel Software offers a unique product suite that covers the entire visitor journey. Unlike the fragmented solutions of multiple vendors that require hotel clutter, P3’s integrated system can handle every touch point in the guest journey – from initial booking to engagement after downtime. This comprehensive approach not only maximizes direct booking potential, but also ensures a consistent, personalized experience that builds lasting guest loyalty. Contact us to discover how our unified platform can transform the digital image of hotels while removing the complexity of managing multiple technology providers.
